Staying close to your customers and potential customers in this tough market is critical. You can’t afford to let even one get away. Treat each with the care they should always be treated with but maybe weren’t back when business was better and there were plenty of fish in the sea.
There still are a lot of fish out there, but the problem is most just aren’t in the mood to bite. When that happens, good anglers use all their tricks to entice those fish suffering from a case of lockjaw into opening their mouths again.
That’s sort of where we are today. Consumer confidence reached an all-time low in December. The jobs picture is dismal. The unemployment rate hit a 16-year high of 7.2 percent in December, as the economy shed another 524,000 jobs. Demand is low, and the first quarter does not look good. But against that backdrop, there still are a few bright spots as we head toward the Miami International Boat Show (not to mention the other winter and spring shows on the horizon).
• Lower fuel costs. Cheaper gas and diesel certainly will reduce one of the hurdles that kept people from using their boats more last season. And I believe that having a little extra cash left in our pockets or checking accounts after we fill up the car or pay the home heating bill makes all of us feel better. Better enough to buy a boat? Maybe. Talk to me. Sell me. Convince me there won’t ever be a better time than right now to buy a boat. As a seller you need to make that fish bite.
• Available money. For the most part, there also is adequate financing available for credit-worthy customers. That said, lending practices have returned to what they were 10 or more years ago, which means buyers will need higher credit scores, larger down payments, more conservative debt-to-income ratios, and so on. That’s probably a good thing long term, even if it does reduce the pool of prospects today.
• A new administration. President Obama and his team plan to focus on jump-starting the economy with an enormous, aggressive fiscal stimulus package that may reach $1 trillion. Will it be enough? Is it too much? How effective will Obama and his economic brain trust be? Right now, we have more uncertainty than answers.
There’s no question it’s going to take a bit of time for the shaky economy and the markets to digest the housing problems, credit mess and more. Someone described it as watching a python swallow a pig. You get the picture — it’s going to be a slow process, with plenty of heartburn.
• Mortgage rates. The rates on 30-year fixed loans in January fell to their lowest level since Freddie Mac began its survey in 1971. Refinancing activity is strong. The bigger question: Will lower rates bring enough buyers back into the depressed housing market?
Our industry is limited in what it can do to influence consumer confidence on a macro scale, but savvy retailers and manufacturers can make business happen one customer at a time through a variety of strategies and initiatives. Even in down markets.
Today’s buyers are looking for deals. They want their personal version of a stimulus package. That’s where rebates from the manufacturers and dealers, as well as cash discounts and free accessories, may be required to get fish biting again. Be creative. Give away VIP tickets. Change your display. One dealer was offering anyone who bought a boat a free week at his family beach house in Florida.
We may find more of today’s cautious buyers using boat shows to do “research,” rather than the place to pull the trigger. If that’s the case, it makes proper postshow follow-up even more critical to securing a sale. The sales process may take longer than it once did; don’t let the trail go cold.
Something else to think about: In this environment, careful buyers will really be doing their homework prior to a purchase. If your Web site is, indeed, the “new front door” to your business, make sure it’s everything it can be and should be.
If we are selling a lifestyle rather than just a product — the “ing” vs. the “thing” — then dealers need to embrace that concept more than ever. Give prospective buyers good reasons to get excited about buying a boat from you rather than your competition. How? Host rendezvous, fishing tournaments or other outings. When you get a new model into your dealership, do some VIP showings. It will bring you closer to your customers — and vice versa.
On another front — with people holding on to their boats longer, dealers, marinas and boatyards with strong service centers will do better than those that don’t. Repairs, refits, upgrades and repowers will be the order of the day for some time to come.
Hope is a great thing, but just wishing things were different won’t make them so. Being proactive works much better at driving business in difficult times. To varying degrees, we’re all reinventing our businesses as we move forward in this new world.
This article originally appeared in the February 2009 issue.